Westerners are so dazzled – and yet, also so perturbed – by China's "rise" that we easily overlook how painful and precarious its 30-year economic reform and opening process has been. In many ways, the transition has been as profound and as traumatic as the UK's 19th-century agrarian and industrial revolutions, which were accomplished with little democracy and scant regard for human rights. Yet most Chinese people remain relatively poor, with average GNP per capita still lower in China than in many Latin American and African countries.

In these circumstances, Chinese Communist party's fears of instability are not stupid and the attempt to impose "harmony" by decree is not irrational. While it remains decidedly authoritarian and determined to nip all opposition movements in the bud, Communist party rule has become much more consultative over the last 20 years. Non-party intellectuals and special-interest groups have been allowed a voice in policy debate; and there has been gradual recognition of the need for "civil society" organisations, such as the Chinese NGOs currently participating in the Tianjin climate change talks.

The line between permissible activism and "unpatriotic" dissidence is never clear in China, and is prone to shift according to the political mood of the moment. This naturally encourages self-censorship and caution.

But there are many unsung heroes – within the Communist party and "official" media, as well as among NGOs and the academy – who are working for incremental political reform, increased "public participation", greater economic and social equality and negotiated compromise between competing interests in the complex and stratified society that is developing. These are China's real peacemakers. They typically eschew the adversarial approach of activists like Liu – whose Charter 08 movement threw a gauntlet down to the authorities – not out of fear, but because they feel there are more constructive ways to achieve peaceful change in the Chinese social, cultural and political context.

The Nobel award will embolden those in China who are most inclined to confrontational tactics. It may well also prompt renewed state security surveillance of reform-minded academics and NGOs, which may, in turn, nudge some more of them over the line from pro-reform advocacy to outright dissidence.

Beyond doubt, though, it will strengthen the argument, within China, that the west is determined to derail China's progress by promoting internal strife.

It would be a grave mistake to think that this is believed only by old, die-hard Marxists, militarists and proto-fascist nationalists. Many educated young Chinese people, who are perfectly capable of thinking for themselves and are, by no means, stooges of the Communist party, are highly sceptical of western prescriptions for China, and want to find a distinctively Chinese, perhaps "Confucian", form of democratisation. Those who have studied in the west, and had a chance to see our warts as well as our freedoms, are among the least inclined to believe that westernisation is the right road for China.

Symbolic gestures such as the Nobel award for Liu help to persuade such young people, who will be China's next generation of political and business leaders, that the west really is fundamentally anti-Chinese and determined to keep China down. And that heightened tension is likely to prolong, not shorten, the Communist party's rule: a strange harvest for a prize given in the name of peace.